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By Peter Jarich, principal analyst, wireless infrastructure, Current Analysis
Last month, I promised that I’d attempt to draw a line between wireless networks and cycling. I know it’s probably über-obvious to anyone in the industry, but here’s the connection: WiMAX.
In case you didn’t hear, October was unofficially “International WiMAX Month.” WiMAX World in Boston. The WiMAX Forum Member Conference in Seoul. BII’s WiMAX Summit in Beijing. Even if I missed something, there were more than enough events in the past month to keep any market tracker busy, all while pointing to a few key trends. Keeping myself busy with events on both sides of the Pacific, I’ve got a few of my own insights. But first, let’s talk about the bike industry.
Today, it’s fair to say that most high-end road bikes (i.e., the machines under most Tour de France racers) have frames made from carbon fiber. Some are built by essentially pressing carbon fiber into a mold. Others use carbon fiber tubes which are bonded together at carbon fiber or metal lugs. Some use a combination of both. As anyone who has seen old race footage knows, the prevalence of carbon fiber is a relatively new phenomenon. In particular, the initial carbon fiber bikes had some major problems. They were expensive. Some had issues with de-bonding. Some were “mushy” or inefficient at translating physical energy into forward motion. Customers looking for custom fit carbon fiber frames had no options. In short, performance was largely lacking. Back to 2006, this has all changed. With proof points such as Lance Armstrong’s seven Tour de France wins, carbon fiber is the de facto gold standard for bike construction from frames to seat posts to wheels and even brakes.
Now, I’m not implying that WiMAX will dominate wireless networks in the future. Ten years from now, however, will OFDMA-based technologies take over from CDMA-based 3G as the “gold standard” for mobile broadband? Yes! It might be WiMAX. It might be LTE or even EV-DO rev. C. Whatever form it comes in, OFDMA is well understood as the follow-on to today’s 3G just as carbon fiber has gradually taken the place of aluminum in the bike industry.
In the meantime—because planning for something 10 years away isn’t fun—there are a few other lessons to be learned.
• Initial Glitches: Early WiMAX service launches are likely to deliver sub-par performance. The media likes to harp on the fact that WiBro hasn’t been particularly successful in Korea and hasn’t managed to best the performance of 3G. Why does this surprise anyone? Just like GPRS and UMTS launches before it, WiMAX performance will improve.
• Initial Costs: Sprint makes some impressive claims about the planned cost of their WiMAX networks. In part, these claims are based on existing network assets. In part, they are based on the use of a 20 MHz channel. Compared with a greenfield deployment of EV-DO rev. A—where 20 MHz would require 16 channel cards—this makes sense (assuming the WiMAX Forum moves on a 20 MHz profile). For operators without these same assets, WiMAX infrastructure costs shouldn’t vary tremendously from 3G costs to the extent that many BTS components are similar.
• Initial Ecosystem: We’ve known for years that carbon fiber can claim strength beyond aluminum or steel. Yet, we’re just now seeing mass-market carbon fiber seat posts, wheels and handlebars. Why? It takes any new technology time to prove its worth and win converts. The number of network and device vendors in the WiMAX space is impressive. It will take time, however, to translate this interest into the widely anticipated ecosystem of WiMAX-based phones, gaming devices and music players.
• Marketing, Marketing, Marketing: If everyone is selling carbon fiber bikes, how do you set yours apart? Marketing. Different grades of carbon fiber. Different “lay-up” processes. Different colors. Different histories. Different prices. This is what helps to differentiate bike brands. What marketing claims will WiMAX vendors use to their advantage? Technology: “My MIMO is the best,” “MIMO plus AAS is better,” etc. Expertise: “Trials and commercial deployments give us insights that nobody else can claim.” Solutions: “Only we can provide the best combination of WiMAX access, core and device kit.” Service: “Beyond our products, we’ll attend to your post-sales needs, whether that means support or integration or deployment.”
If we’re ranking lessons, however, none of these come out on top.
Over the past month, I’ve been lucky enough to chat with various operators who are planning or in the process of deploying WiMAX networks—networks in North America, South America, Asia and Europe. With few exceptions, all were upfront about one outstanding question: What new applications will drive WiMAX forward? What will people do with these networks that they can’t do today?
While not particularly satisfying, the simply answer is, “nothing.” 3G provides a data pipe supporting VoIP, video streaming, gaming, web browsing, etc. So, too, will WiMAX. WiMAX, however, if it lives up to its claims, will be faster, cheaper and in a broader array of devices. The result should be a better experience. It may even drive usage on particular applications. None of these applications, however, are likely to be revolutionary.
Back to the bike, carbon fiber didn’t drive any new uses for bikes. There’s nothing you can do on a carbon fiber bike that you can’t do on a steel or aluminum or titanium one. To be fair, carbon fiber can be used to make a bike that’s more comfortable and lighter than with other materials. Riders, in turn, can go longer or faster or tackle steeper hills. Ultimately, though, the basic application—riding a bike—remains the same.
Would-be WiMAX operators should take note. WIMAX may promise new wireless functionality, but they can’t count on radically new applications when justifying a deployment. Luckily, they can—over time—count on performance boosts which should make these applications more appealing and profitable.
Questions or comments about this column? Please e-mail Peter at pjarich@currentanalysis.com or RCR Wireless News at rcrwebhelp@crain.com.
